Debt relief is the exoneration of debts owed by individuals, state or cooperation. These debts can be reduced to a smaller amount which would be affordable to the debtor. The growth of these debts can be slowed or stopped as a form of pardon. In this case the terms of the debts are usually modified to the advantage of the debtor. Other debts can be completely cancelled. Forgiveness of debts is known to take place from time in memorial.

Can Debt Settlement Really Fix My Money Issues? - Mediator Debt Solutions

Debt relief existed in the ancient society  債務舒緩  and still exists in the general public to date. Most of the debts known to be forgiven to during the ancient time were personal debts. There were specific times that creditors would forgive debts to people who owe them when they are genuinely unable to pay back. The main reason to why most debtors are unable to pay back the debts is bankruptcy. Although there are other reasons like when a debtor cannot be traced to make repayments of the debt, bankruptcy is the main reason.

In the ancient day those who were unable to repay their debts were locked in debtors’ prisons. This move made no big difference since the debts still remained unpaid. When the debtors’ prisons became too many and too harsh to the debtors, activists emerged to campaign against these prisons. They held negotiations on the best solutions to end up these prisons and came up with debt relief. Debt relief was not welcomed in many societies since some people used lending money as a form of generating income via the interest charges on the money borrowed.

It is argued that the funds granted to poor countries for example, may not reach the intended people or projects that may be in dire need of these funds. This is mainly a result of corruption and citizens of a nation may not get their interests fulfilled. Others argue that these countries may go into more debts with the idea that they will also be relieved in future after they are found to be unable to pay them. Most of the funds are used improperly and this is what discourage the funders to grant debt reliefs.

Forgiveness of these debts should only be granted to those who are genuinely unable to pay in relation to their ability and financial well being. Several debt relief programs have been initiated with the aim of assisting in gauging who can be appropriated debt relief and how that would be implemented. They determine whether a debt relief should be granted in relation to the nature of the debt and considering other factors that might lead them to a good conclusion about the fate of the debt. When a debt is relieved it is always taken that one is bankrupt and it is always not a good idea to many because their reputation tends to be lowered. Debt relief should be done as a last resort as it will always bring problems when a person, institution or country wants to do business.

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